He says the country’s labour laws, which are intended to
protect labour from apartheid-like exploitation are actually counterproductive
– slowing business expansion and therefore costing the country jobs in the
misguided attempt to save jobs.
The Labour Relations Act, Mashaba argued recently in Forbes
magazine, “ Is really destroying jobs in our country …. No one goes into
business to employ people. You go into business to make money,” the self made
millionaire said.
And Mashaba who
lifted himself by his boots traps and built a fortune in cosmetics should know.
The perennial tension between labour and capital, while less
antagonistic than it was while communism was a global counterweight to the free
market, is still very alive, though the balance has shifted irreversibly
towards capital with our new unipolar world.
Reflecting on Labour Day the Ugandan worker is not having an
easy time. Woefully under represented, criticized for being unproductive and
seemingly trampled on at the expense of “investors” they may have seen better
times.
To turn this sorry situation around it goes without saying
that labour needs better leadership.
The main challenge for Uganda’s labour is its relative level
of unproductivity when gauged against regional and continental standards.
Last year a study showed that a Kenya at a comparable job
level does the work of six Ugandans and a Tanzanian does the work of three
Ugandans.
Casual onlookers quickly jumped on the subject to harangue
our workers for being lazy, good for nothing space occupiers. But the reason
for this I think has its source in an unlikely place – the lack of a minimum
wage in Uganda.
Government argues that instituting a minimum wage would act
as a disincentive to investors. In fact Uganda’s relatively lax labour policies
are where the country scores highest in competitive measurements.
What no minimum wage does is allow for low quality investors,
who are unwilling to invest in better technologies to set up shop here.
This is important because the low productivity of the
Ugandan worker is less a function of laziness as it is a function of being
undercapitalized. Basically because an employer can employ three workers where
he could have employed only one supplemented by technology, our workers produce
less per person than their more capital enabled cousins in Kenya and Tanzania.
A minimum wage would discourage the poor quality investor
and allow in the better quality investor ready to inject capital into his
enterprise and employ less workers per unit of output to make it viable.
Maybe Uganda could not afford the luxury of more expensive
workers because in the absence of adequate power it is hard to justify
increased mechanization. But now that our power deficit – we have been
promised, will be sorted out once and for all come July, it is time to rethink
the minimum wage.
And Uganda’s labour needs to position itself for this
seemingly populist proposal, because inevitably low skilled labour will be
ditched for higher skilled workers who can man the newly automated plants.
In addition government too needs to rethink its policies on
taxation. To get the African to produce cash crops for her factories the
colonialist introduced the poll and hut taxes. Africans then had to produce
cash crops to get the money to pay the tax.
The politically motivated scrapping of the graduated tax a
few years ago has affected productivity in the rural areas. It is true that
there are some people in our society who are internally motivated and work
without external compulsion, those are the barest minority. The vast majority
of people need external stimuli to work and that is what taxes do.
What is popular is not always right and what is right is not
always popular. But a reinstatement of graduated tax – while expensive to
administer, would have the far reaching effect of getting our workers off their
back sides.
A land tax to unlock all the thousands of square miles
around our country would be similarly useful.
Back to labour. In order to retains it relevance labour
needs to shed its antagonism towards capital by understanding it allowing
itself to insert itself into their thinking. They have no choice because
capital has more influence over governments than they do.
